IMF urges carbon hikes from 'large emitting countries'

IMF urges carbon hikes from 'large emitting countries'

The IMF has urged “large emitting countries” to hike their carbon taxes as quickly as possible.

It said that “actions and commitments to date have fallen short”, warning “the longer we wait, the greater the loss of life and damage to the world economy”.

It said finance ministers will have a key role to “champion and implement” tax increases that help to mitigate climate change.

“To do so, they should re-shape the tax system and fiscal policies to discourage carbon emissions from coal and other polluting fossil fuels,” the fund said in a blog posting, Fiscal Policies to Curb Climate Change.

Here, Paschal Donohoe, the finance minister, in his budget this week announced a €6 hike in carbon charges to €26 a tonne, with an aim of €80 a tonne by 2030.

The increase drew criticism from advocates who say that the increases should be more and from others who said the vulnerable in society were not protected against the rise in petrol and heating costs.

The IMF said “large emitting countries” ought to hike carbon taxes to $75 (€68.50) a tonne by 2030.

“Governments will need to increase the price of carbon emissions to give people and firms incentives to reduce energy use and shift to clean energy sources. Carbon taxes are the most powerful and efficient tools, but only if they are implemented in a fair and growth-friendly way,” according to the blog post by Vitor Gaspar, Paolo Mauro, Ian Parry, and Catherine Pattillo.

“About 50 countries have a carbon pricing scheme in some form. But the global average carbon price is currently only $2 a tonne, far below what the planet needs. The challenge is for more countries to adopt one and for them to raise the price,” they said, praising Sweden for rising carbon taxes to $127 a tonne and reducing its emissions by a quarter in the past 25 years.

“Acting individually, countries may be reluctant to pledge to charge more for carbon if, for example, they are worried about the impact of higher energy costs on the competitiveness of their industries,” they said.

“Governments could address these problems with agreement on a carbon price floor for countries with high levels of emissions. This can be done equitably with a stricter price floor requirement for advanced economies. Countries that want to use different policies, like regulations to reduce emission rates or curb coal use, could join the price floor agreement if they calculate the carbon price equivalent of their policies.”

More on this topic

Letter to the Editor:  Ireland could pay carbon tax for other jurisdictionsLetter to the Editor: Ireland could pay carbon tax for other jurisdictions

Questions raised over Government's spending of €3bn carbon tax incomeQuestions raised over Government's spending of €3bn carbon tax income

Motorists can't afford Budget tax hike, AA warnMotorists can't afford Budget tax hike, AA warn

Government should scrap planned carbon tax hike, Brid Smith saysGovernment should scrap planned carbon tax hike, Brid Smith says

More in this Section

Thomas Cook executives urged to hand bonuses to workers’ pension fundThomas Cook executives urged to hand bonuses to workers’ pension fund

Fund to drive SME and public sector collaborationFund to drive SME and public sector collaboration

Almost half of adults do not have a private pension - studyAlmost half of adults do not have a private pension - study

Facebook officially launches digital currency Libra despite defectionsFacebook officially launches digital currency Libra despite defections


Lifestyle

My sister Gabriella always says that during sibling whispers all I ever wanted was to be on stage.This Much I Know: Man of many talents Mike Hanrahan

Columnist and trained counsellor Fiona Caine offers guidance to a woman whose husband is controlling and belittling her.Ask a counsellor: ‘My husband is so controlling – what do I do?’

Peter Dowdall branches out to take a look at the mountain ash or rowan.Rowan berries show us how nature is stocking its larder for winter

More From The Irish Examiner